Different investment ideas

Here are a couple large-cap stocks that look promising at the moment (September 3, 2011). As usual, this is only an idea, for the reader to research further and produce their own opinion. It is not advice.

Agrium (AGU) is a global producer and marketer of agricultural products. With a P/E ratio of just 12.8 and debt to equity ratio of 36%, the shares appear cheap and the company seems stable. The share price has risen 13% over the past year, compared to the market at just 4%. Due to the economic difficulties that have persisted over the last three years, food products are seen as a defensive investment.

Iamgold (IMG) is engaged primarily in the exploration for, and the development and production of, mineral resource properties throughout the world. Shares in this company have a low P/E of 9.9 and the corporation has no long-term debt. The share price has risen almost 8% over the past year. With high gold prices, this company should be profitable, especially while gold is used as a defensive investment.

Shoppers Drug Mart (SC) is the licensor of full-service retail drug stores Shoppers Drug Mart and, in Quebec, Pharmaprix. The P/E is currently 14.6 and the corporation has a low debt to equity ratio of 16%. Over the last year, the share price has risen just over 8.5%. Again, this can probably be considered a consumer staple, preferable during times of economic uncertainty.

Tim Hortons (THI) is a quick service restaurant chain in North America. The Company’s offerings includes premium coffee, flavored cappuccinos, specialty teas, home-style soups, fresh sandwiches, wraps, hot breakfast sandwiches and fresh baked goods, including its trademark donuts. The shares seem to be bargain priced at a P/E of just 12.8. The company has a debt to equity ratio of 38%. The price performance is impressive, returning 21% over the past year, far in excess of the 4% market return. I don’t understand it, personally, but Timmy’s seems to always be busy, whether the economy is booming or busting.

These ideas represent companies whose share price has outperformed the market recently, but which also appear to be reasonably-priced and where the balance sheet is not over leveraged. They should produce relatively good performance over the next few months, but as always the responsibility remains with the investor to perform due diligence and monitoring.